November is Financial Literacy Month and here at FSGV, we believe that all British Columbians should have access to tools and knowledge to feel empowered about finances.
The theme for Week One is “Managing Expenses” and to get some practical advice, we spoke to two financial experts here at Family Services.
Thao Tran holds an MBA in finance and is trained in accounting. Her parents came back from the Vietnam War and built a stable and loving family with their bare hands and warm hearts. Following in her father’s footsteps, Thao loves to work with families and individuals and to empower them to build a better relationship with money and to be the experts of their lives. Thao is also a life coach and studying to be a registered professional counsellor. In her spare time, Thao likes to read, hike, do yoga, and garden.
Joanne Monteiro holds an MBA in finance and a Diploma in Teaching. She worked in the corporate world before venturing into educational services specializing in ESL training, and is enthusiastic and passionate about teaching and financial literacy in particular. Having lived in Dubai, Cyprus, the United States, and Canada, Joanne uses this cultural exposure to reflect on how she can best serve her clients. Outside of work, Joanne enjoys travelling, hiking and trying different cuisines.
Here’s what Thao and Joanna have to say about managing expenses and understanding credit:
Let’s start with a definition. What is credit?
Credit refers to an agreement between a lender and a borrower to obtain goods or services with the understanding that the borrower is going to pay it back later.
We’ve heard the term “healthy credit” before. What does this mean?
Healthy credit is when you have a good credit score, spend within your limit, and have the ability to pay back the borrowed amount on time. A person who has a healthy credit establishes trust with the borrowers and they are considered as a safe risk.
What advice can you provide to someone who wants to build their credit?
There are a number of actions that you can take to build your credit:
- Start to build credit early so that you can build a better credit history.
- Do not spend over 75% of your credit limit.
- Pay bills on time.
- Do not have too many credit cards or other types of credit.
- Check your credit report and if there are errors, communicate with the credit bureau to have them corrected.
- Think twice before you co-sign any loan.
- Apply for credit only if you need it.
- Check you banking and credit card statement(s) for any suspicious transactions that may negatively impact your credit score.
Do you have any recommendations for when someone feels overwhelmed by bills?
- Spend some time to calm yourself.
- Rework your budget and try to cut down on expenses.
- Explore ways that you can increase your income (i.e. additional part-time job, taking in a home stay student, etc.)
- Make a list of all your bills and see which one you have the ability to pay.
- For the remaining bills, you might want to communicate with the product or service providers to arrange a re-payment plan.
- Explore a lower interest consolidation loan to pay off high-interest credit such as credit cards or payday loans if you have them.
- Decide if you need additional help. If you do, contact the Money Navigator at FSGV.
This time of year can be difficult for individuals and families. What’s the best approach for making holiday purchases and managing debt?
- Make a list of your holiday purchases and the amount for each purchase. No impulse buying. Be mindful of advertising traps. All purchases should be made within your budget.
- Set gift dollar limits among your family or friends so that no one gets carried away and overspends.
- Consider a draw among family or friends where you each pick a name and buy a gift for that person rather than everyone purchasing separate gifts for everyone.
- Take advantages of good deals such as Black Friday and early Boxing Day sales.
- Consider homemade gifts (i.e. baking, crafts, knitting, etc.)
- Give gifts that create memories (tickets, camps, sports, or other activities), not ones that end up in the landfill.
- If you decide to take on debt, make sure that you have realistic plan to pay it back.
The FSGV Financial Empowerment program helps people gain confidence about their financial literacy, access government benefits, and make the most of their money.